Question 1 Information regarding the community’s average income and movie ticket sales at the Ruby Red Movie Theater for both last year and this year are presented below. Use this information when answering questions A–C, below. Last Year This Year Community’s Average Income $55,800 $57,474 Movie Ticket Sales 4,980 5,021 A. Calculate the Income Elasticity of Demand for movie tickets. (Show your work. You can type it in the box below, or write it out by hand, take a picture, and insert the picture in the box. Make sure it fits in the box. NOTE: These options apply to all “Show your work” responses.)Are movie tickets considered to be inferior goods, normal goods, or unit (unitary) goods in this town? Explain why. B. Are movie tickets considered to be inferior goods, normal goods, or unit (unitary) goods in this town? Explain why. C. A new firm is relocating to the city and adding a large number of above-average salaries. Will the number of movie ticket sales for the theater increase, decrease, or remain constant? Base your answer on the information you answered in part B above.
Unit III Assignment Worksheet
Background Information
The Ruby Red Movie Theater in town is in jeopardy of having to close its doors because it is unable to generate enough total revenue. In an effort to generate more total revenue, the movie theater manager decided to change the prices this month for drinks, popcorn, candy, hot dogs, and movie tickets.
The manager would like for you to analyze the data that has been collected to help decide if the decisions to change the prices were correct and, if not, what should be done to prices to generate more total revenue. Be sure to answer all of the questions in this worksheet.
Question 1
Information regarding the community’s average income and movie ticket sales at the Ruby Red Movie Theater for both last year and this year are presented below. Use this information when answering questions A–C, below.
|
|
Last Year |
|
This Year |
|
Community’s Average Income |
$55,800 |
|
$57,474 |
|
Movie Ticket Sales |
4,980 |
|
5,021 |
A. Calculate the Income
B. Are movie tickets considered to be inferior goods, normal goods, or unit (unitary) goods in this town? Explain why.
C. A new firm is relocating to the city and adding a large number of above-average salaries. Will the number of movie ticket sales for the theater increase, decrease, or remain constant? Base your answer on the information you answered in part B above.
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